Despite improving market, underwater homes a big problem - New York News

Despite improving market, underwater homes a big problem

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PHOENIX -

We've heard that the housing market is getting better, but underwater homes are still a big problem here in the valley. Those homeowners remain stuck with few, if any, options.

For the Picazos, home ownership has led to stress, frustration and desperation.

"We had no idea about the bubble," says Mike Picazo.

The housing bubble popped soon after the couple bought a modest 3-bedroom home in west Phoenix in 2005. They've been underwater for the last several years.

"We're tired. It's taken a toll. Our family, its stressful, it is stressful."

Today the Picazos' 3-bedroom home appraises for about $66,000. Back in 2005, the couple paid $165,000.

"With it being $100,000 upside down, I was pretty upset, pretty upset," says Beatriz Picazo.

Despite the comeback in home values over the last year, the Business Journal reports that nearly one-third of all mortgages in the state remain underwater.

"One of three homeowners that have a mortgage are upside down, and they're getting that feeling that they're alone again, because they're hearing its good news week, and they're 50, 70, 100 thousand dollars upside down," says Marge Peck of Peck Team Realty.

The Picazos are clients of Peck's.

She says Wells Fargo has turned down the couple's hardship request for a short sale several times. The electricity is out in the kitchen, forcing them to plug the fridge into an extension cord. The roof needs to be replaced, and there are other problems that they can't afford to fix.

"The family is suffering and the lender is saying there's no hardship. How wrong is that?" says Peck.

"It's not a game. This is people lives and there's still a lot of hurt out there. There's a lot of good news, but there's a lot of hurt. There's a lot of people that are upside down."

The Picazos say they've had several offers on their home that have met the appraisal of $66,000, but Wells Fargo won't accept the short sale price.

The family continues to make their payments on time, not wanting to walk away from their obligation.

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